” Should you press that panic button and cut down costs on brand imperatives as your CFO just advised for the umpteenth time on the pretext that sales are low? Despite what that professor said at your MBA school in the 90s, recent and deeper insights have proven that the opposite is actually the smart way forward.”
As the spectre of official recession loomed ever closer, the times have been strategic indeed for businesses on the Nigerian terrain. The country’s GDP recorded a negative growth of -0.36 percent during the first quarter of 2016 (National Bureau of Statistics). With the eventual reality of a second quarter negative index in June, the back-to-back negative GDP indices have now officially confirmed Nigeria’s economic recession status. What will this portend for your business fortune and branding efforts? This is the question.
The prior brand capital you have shored up and the communications priorities you adopt now will determine your ability to withstand the shocks and your long-term brand sustainability. Should you press that panic button and cut down costs on brand imperatives as your CFO just advised for the umpteenth time on the pretext that sales are low? Despite what that professor said at your MBA school in the 90s, recent and deeper insights have proven that the opposite is actually the smart way forward. Recession is not the time to compromise on brand investment but to actually step it up, albeit strategically, especially for long-sighted brand value that is often lost on less strategic CEOs. Big businesses thrive on big thinking.
Consumers, unfortunately, can be very capricious especially if brand loyalty has not been deeply established (check your brand capital quotient). Customers are key assets that must be courted and nurtured on sustained basis. The atmosphere of psychological disincentive to purchase during a recession makes this philosophy to become even more important to coax out sustained interests and reduce chances of apathy for your products or services. Furthermore, branding entrenchment in this period is critical for brand loyalty and reduces the potential of your consumers jettisoning your brand for ‘’recession-friendly’’ products/services.
As some companies slack off on branding and marketing endeavours due to rising business costs and scarce disposable income, the situation opens up a strategic window for the discerning to seize market share through tactical visibility, improved brand image and appreciation. Beware that in a recession (which has now become official for Nigeria), consumer fickleness increases by up 50% in the first year due to cost sensitivities. This means that today’s consumer is virtually on the edge of her seat, awaiting the slightest erosion of brand perception to jump ship; a subliminal preference dynamism accentuated by austerity. This observation should be considered in your brand sustainability realities.
Furthermore, in a climate of dwindling purchasing power where every kobo spent seeks a cost effectiveness justification in the subconscious of the consumer, you need to intensify efforts to provide brand justification on why yours must command patronage over competition. Although marketing can be a subjective persuasion, it is still the market, shaped by what you do and not do, that decides your rewards objectively. So what is your (unique) brand proposition? Research shows that at least 60% of consumers will continue to patronise a strongly branded product despite competing lower-priced alternatives due to emotional and psychological brand endearment.
Recession never lasts forever. Where will your brand be positioned on the morning after? Consistency of branding efforts produces customer attraction, endearment and loyalty, as well as ‘unsolicited marketing’ of your brand by referrals and ultimately market share consolidation. So whilst this is a good time to surgically eliminate all unnecessary costs (yes, including those frivolous ‘marketing’ activities that even the janitor knows do not add value), maintaining core-branding interventions is non-negotiable. A period of recession is, therefore, not the time to step down on branding efforts but a window of opportunity to reposition your brand and make every kobo spent worth it.